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DIRECTIVE No

DIRECTIVE No.573-TTg OF AUGUST 23, 1996 OF THE PRIME MINISTER ON CREATING CONDITIONS FOR THE STATE CORPORATIONS ESTABLISHED BY DECISION OF THE PRIME MINISTER TO EARLY START STABLE OPERATIONS

To date the Prime Minister has issued decisions establishing 18 State Corporations to operate according to the model defined in Decision No. 91-TTg of March 7, 1994 of the Prime Minister (Corporations 91 for short). Although they have not been long in operation and are still facing many difficulties, the results obtained by Corporations 91 during the past year or so of operation have begun to prove that this model of organization is in the right direction and conforms to the requirement for renewal of the State-owned economic sector. In order to create conditions for Corporations 91 to early start their stable operations and fulfill the tasks assigned by the State, the Prime Minister instructs the branches concerned to urgently do the following works:

1. On guiding the implementation of the Law on State Enterprises:

The State agencies according to their assignment of responsibilities should early perfect the contents of documents to submit to the Government and the Prime Minister for issuing, or issue by themselves documents guiding the implementation of the Law on State Enterprises, particularly the documents directly concerning the State Corporations. Following is the working order:

a/ The Ministry of Planning and Investment shall prepare:

- A Decree on the establishment, re-organization, dissolution and bankruptcy of State enterprises to submit to the Government for promulgation in August 1996.

- A Decree on State management and the exercise of the State’s ownership over State enterprises to submit to the Government for promulgation in late October 1996 to guide the implementation of Article 25, Article 26 and Article 27 of the Law on State Enterprises.

- In September 1996, the Ministry shall sign into effect the Planning Regime for the Corporations established by decision of the Prime Minister after the Prime Minister approves of the contents.

b/ The Ministry of Finance shall prepare:

- A Decree on the Regulations of financial management and business accounting for State enterprises to submit to the Prime Minister for promulgation in early September 1996.

- The Ministry shall sign into effect right in August 1996 the model Financial Regulations for State corporations. The Managing Councils of Corporations 91 shall base themselves on the model Regulations to compile the Financial Regulations of their Corporations, and sign it into effect by the end of October 1996 at the latest, after the Ministry of Finance approves of the contents. Any deviation from the Regulations on financial management and business accounting for State enterprises when it is officially promulgated by the Government shall be amended by the Ministry of Finance at an ulterior date.

c/ The Government Commission on Organization and Personnel shall prepare and sign into effect in September 1996 the salary and allowance regime for the members of the Managing Council (salaries for full-time members and allowances for part-time members).

While preparing it, the Government Commission on Organization and Personnel should discuss and reach agreement with the Ministry of Labor, War Invalids and Social Affairs on this issue. As for Corporations 91, they can pay the Chairman of the Managing Council a salary equal to that of a Vice-Minister and the members a salary equal to the highest salary of a department head. The General Director shall be paid according to a separate stipulation. Those persons who are paid more than the rates set here shall retain the rates of payment if they are appointed to the Managing Council by the Prime Minister.

d/ The Central Steering Board for Renewing Enterprises shall prepare and in September 1996 give guidance on:

- The working statute of the Managing Councils of Corporations 91, and the relationship between the Managing Council and the General Director.

- The working statute of the Control Commission.

e/ The General Department of Statistics shall prepare and in late October 1996 issue documents supplementing and amending the reporting and statistical regime in accordance with the Law on State Enterprises and other sub-law documents concerning State Corporations after discussing and reaching agreement with the Ministry of Planning and Investment and the Ministry of Finance.

2. On the organization and personnel of Corporations 91:

a/ The Government Commission on Organization and Personnel shall discuss with the State agencies concerned to submit from now to the end of October 1996 proposals to the Prime Minister to appoint enough key officials for Corporations 91, particularly those Corporations which are still without Chairmen of the Managing Councils and Deputy General Directors. Besides, the Commission should revise the existing staffs of the Managing Councils of Corporations 91 and submit them to the Prime Minister to adjust irrational cases, especially where State managers cumulate the responsibilities of both the Chairman of the Managing Council and the Head of the Control Commission.

b/ In the third quarter of 1996, the Managing Councils of Corporations 91 must perfect the Control Commission. In case the Ministry of Finance and the Ministry in charge of the economic-technical branch concerned fail to recommend full-time members as stipulated in the Statutes of the Corporations, the Managing Council can choose qualified persons and make them full-time members of the Control Commission so that they may have the conditions to carry out well the tasks assigned by the Managing Council.

c/ All Corporations 91 must elaborate and issue in September 1996 the Regulations on the work of their assisting staffs. The Managing Council and the General Director shall use this staff together without organizing separate assisting staffs.

d/ The Managing Councils of Corporations 91 must ratify the Statutes and Regulations on the organization and operation of all member units by the end of 1996 at the latest.

e/ The Managing Councils of the Food Corporations in the North and the Food Corporations in the South in September 1996 should issue the Regulations on the operation of their member food enterprises, clearly stipulating that, in addition to carrying out the tasks assigned by the Corporation, these enterprises must also perform the task of purchasing and processing food grains in the province as assigned by the People’s Committees of the provinces and cities directly under the Central Government, and comply with the principle that with the member enterprises of the Corporations engaged in food business and supply of food to the people in the province, there is no need to set up a local food enterprise.

3. On the financial issues of Corpora- tions 91:

a/ The Ministry of Finance should urgently do the following works:

- Finishing capital allocation to Corporations 91 by the end of September 1996 at the latest.

- From now to the end of 1996, it shall specify for each Corporation 91 a list of semi-products transferred among member units for finishing and the services transferred among member units to serve production without having to pay turnover tax.

- Urgently implementing the Prime Minister’s directive on the supply of capital to the Vietnam Gemstones and Gold Corporation as pointed out in Point 3, Official Dispatch No.519/KTN of January 30, 1996, of the Office of the Government.

- Studying and submitting to the Prime Minister measures to settle the shortage of capital for a number of other Corporations 91, such as reserve working capital for the Food Corporation of the North and the Food Corporation of the South, in order to buy commodity food grains from farmers according to seasons, and the necessary capital for the Vietnam Shipbuilding Corporation to complete the building of ships as planned.

b/ The existing debts owed by the enterprises at the point of time when they become members of Corporations 91 shall be settled as follows:

- If a debt incurred by the enterprise because it has to carry out an instruction of a State agency, the latter shall have to take measures to repay it.

- A debt incurred as a result of the enterprise’s business activities shall be repaid by the enterprise under the direction of the Corporation.

c/ The Ministry of Finance shall cooperate with the State Bank to create conditions for the early establishment and operation of financial companies in Corporations 91.

4. On the relationship between Corporations 91 and State agencies:

a/ The State agencies when issuing legal documents concerning State enterprises must send copies of these legal documents to Corporations 91.

b/ When submitting proposals to State agencies for settlement, Corporations 91 shall apply the principle of going only to one door for each specific matter. An issue that comes within the jurisdiction of any State agency should be submitted directly to that State agency by these Corporations for settlement. If necessary, this State agency shall discuss with the other State agencies concerned to settle it and answer the Corporations without having to ask them to enclose the opinions of the State agencies concerned. If an issue comes within the jurisdiction of the Prime Minister, the Corporations apart from sending a copy to the Prime Minister (through the Office of the Government) must send a copy to the Ministry in charge of the economic-technical branch, the relevant Ministry and the provincial People’s Committee concerned, so that when the Prime Minister needs to consult them, they have already been prepared.

c/ The Minister-Director of the Office of the Government shall establish a section in the Office of the Government to act as an agency to help the Prime Minister in directing and settling the proposals of Corporations 91. Pending the establishment of this section, the Central Steering Board for Renewing Enterprises shall assume the task of the said agency.

5. Party organization and Trade Union organization in the Corporations:

a/ The Central Organization Commission should discuss with the Central Economic Commission to early give guidance on the form and contents of activity of the Party organization in the State Corporations.

b/ The Vietnam Confederation of Labor should early give guidance on the form and contents of activity of the Trade Union organizations in the State Corporations.

6. Other issues:

The Central Steering Board for Renewing Enterprises shall have to cooperate with the agencies concerned in helping the key officials in the State Corporations and the State agencies concerned to understand the contents of the legal documents and exchange experiences concerning the organization and operation of the State Corporations.

For the Prime Minister,

Deputy Prime Minister,

TRAN DUC LUONG